Some investors prefer a wide range of investments so they have a diverse portfolio and to help spread the risk. FundsNetwork
TM has a wide range of investment categories for you to choose from.
Distribution
This category contains funds that aim to produce high income and some capital growth. This is achieved by holding a balance of investments with typically no more than 60% of the portfolio in equities. The remainder is invested in bonds and similar asset types.
Natural Resources
This fund category invests in a variety of sectors, including gold, mining and energy. Companies could be involved in production, exploration or scientific research, focusing on anything from precious metals to alternative energy sources.
Tracker
Funds in this category follow the performance of a particular stock market index, such as the FTSE 100. Some trackers do this by holding every company in an index, while others invest in a range of stocks that broadly reflect it. Trackers are not necessarily low-risk.
Ethical
Some ethical funds simply screen out companies in particular industries, such as arms, gambling and tobacco. Others actively seek out companies with positive policies on issues such as environmental sustainability, human dignity and labour relations.
Property
Traditional funds invest in bricks and mortar and investors' returns represent growth in the value of the fund's properties, plus a share of rental income.
Other funds invest in companies in the property sector, such as house builders, or in Real Estate Investment Trusts (REITs), companies that own income-producing real estate such as shopping centres and offices.
The value of these funds can go down as well as up so you may get back less than you invested. For funds that invest overseas, the return may increase or decrease as a result of currency fluctuations.
